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Retailer V. Crushing Equipment Manufacturer

Date of Claim raised: 22/02/2023
Date of Conciliation: 14/03/2023
Date of Settlement: 14/03/2023
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

In the bustling city of Mumbai, a well-known wholesale trader and retailer, the Claimant, found themselves embroiled in a dispute with the Respondent, a leading manufacturer of crushing, screening, and size reduction equipment based in Udaipur. The dispute arose over the nonpayment of a significant amount, totaling Rs. 12,74,236/-. Despite the Claimant's repeated demands for payment, the Respondent failed to fulfill their financial obligation, leading the case to be brought before PrivateCourt for resolution.

The Issue:

The dispute between the Claimant and the Respondent originated from a business transaction involving the purchase of various products, including drill machines and welding machines. The Claimant, based in Mumbai, had procured these items from the Respondent, located in Udaipur. However, upon delivery, the Claimant discovered several issues with the products, such as defects and malfunctions, rendering them unusable for their intended purposes.

Consequently, the Claimant sought compensation from the Respondent, as they had incurred significant losses due to the non-functioning equipment. Moreover, the Claimant argued that the Respondent had breached their contractual agreement by delivering faulty goods and subsequently failing to provide adequate redress.

Furthermore, there were additional reasons put forth by the Claimant:

Delivery Delays: Apart from the quality issues with the delivered products, the Claimant also faced significant delays in receiving their order. The Respondent failed to adhere to the agreed-upon delivery timeline, causing disruptions to the Claimant's business operations. The Claimant argued that the delayed delivery impacted their ability to fulfill their own customer orders and resulted in financial losses. They held the Respondent responsible for the damages incurred due to the delayed shipment.

Lack of Communication: Throughout the transaction and subsequent dispute, there was a lack of effective communication between the Claimant and the Respondent. The Claimant alleged that the Respondent was unresponsive to their complaints and demands for resolution. They contended that the lack of communication exacerbated the situation and hindered the timely resolution of the dispute. The Claimant emphasised the importance of open and transparent communication in a business relationship and held the Respondent accountable for their failure to address the issue promptly.

Breach of Warranty: The Claimant asserted that the delivered products were accompanied by warranty agreements, which guaranteed their performance and functionality. However, the Claimant experienced multiple instances of equipment breakdowns within a short period, suggesting a breach of the warranty terms by the Respondent. The Claimant argued that they had followed the prescribed usage and maintenance guidelines for the equipment, making the defects the responsibility of the Respondent. They sought compensation for the losses incurred due to the defective products and the breach of warranty.

In response, the Respondent contended that the Claimant had mishandled the products, leading to their malfunction. They disputed any liability for the damages suffered by the Claimant.

The PrivateCourt Proceedings:

The PrivateCourt team promptly sent a notice to both parties, outlining the upcoming conciliation process. They requested relevant documents from the Claimant and the Respondent to evaluate the claims made by each party. After thoroughly vetting the evidence, the PrivateCourt team scheduled a conciliation session via Zoom and audio calls conference.

During the conciliation proceedings, both the Respondent and the Claimant engaged in positive discussions with the aim of resolving the dispute amicably. The Respondent, recognising the validity of the Claimant's grievances, expressed their willingness to settle the matter outside of court. They promptly informed PrivateCourt of their intent to reach a mutually acceptable resolution.

The Settlement Agreement:

Following the constructive negotiations facilitated by PrivateCourt, a settlement agreement was drafted. According to the terms of the agreement, the Respondent agreed to pay the disputed amount of Rs. 12,74,236/- to the Claimant on or before 30th April 2023. It was explicitly stated that failure to comply with the settlement agreement would result in an interest charge of 18% per annum, calculated from the date of default, which coincides with the date of the original invoice.

Furthermore, the settlement agreement stipulated that any future claims or disputes arising from the agreement itself would be resolved through e-arbitration, adhering to the rules and procedures of PrivateCourt.

The Inference:

This case demonstrates the effectiveness of ADR for resolving commercial disputes. And how it played a vital role in bringing about a fair and satisfactory resolution to the dispute, fostering trust and preserving business relationships between the parties involved.

PrivateCourt Journal Vol Q1 2022-23

Authored by our founder and promoter, Mr. Ankit Verma, this book is a must-read for individuals who want to learn the nitty-gritty of Negotiation, Mediation, Conciliation and Alternate Dispute Resolution.

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Dispute Resolution via Negotiation